If you're looking for an emerging market to launch your startup, perhaps no market is more ripe than the Kingdom of Saudi Arabia. Since KSA joined the World Trade Organization in 2005 and modernized its trade policies to reflect global practices, foreign investment in the country has exploded.
Although some trade areas remain off-limits to foreign investors, Saudi Arabia has significantly expanded investment opportunities for international entrepreneurs in recent years. And as Saudi Arabia continues to modernize and open its doors to foreign tourists, the region is becoming an increasingly attractive prospect for startup opportunities.
There are some barriers to starting a business or startup as a foreigner in Saudi Arabia, such as the need to obtain permits and visas, but the Saudi government is making it increasingly easy for entrepreneurs to set up shop. I'm doing it.
Nevertheless, before planning to do business in Saudi Arabia, it is important to check whether you need to obtain a Saudi permit or visa. This may vary depending on your nationality and country of residence (see, for example, Do UAE residents need a Saudi visa?).
Advantages of basing your startup in Saudi Arabia
There are many social and economic benefits to establishing a startup in Saudi Arabia, including:
- ease of doing business
- Positive attitude towards foreign capital
- In many cases, foreigners' salaries are not subject to income tax.
- Diversification progresses as we move away from an oil-dependent economy
- Cutting-edge business practices with the latest technology
- High standards of medical care and education
- The friendly nature of Saudi Arabians
- Saudi culture emphasizes family
- One of the countries with the lowest crime rate in the world
In addition, Saudi Arabia created NEOM, a designated “investment zone,” which has attracted more than $500 billion in funds. We are focused on attracting investment in the following areas:
- energy and water
- Mobility and biotechnology
- food production
- Technology and digital science
- advanced manufacturing
- media and entertainment
NEOM is part of a long-term strategy to promote international capital investment. This is billed as “separate from Saudi Arabia's existing government framework” and is a deliberate attempt to remove capital investment from the Saudi public sector.
Determining the market for Saudi startups
There are several opportunities for foreign investors looking to establish startups in Saudi Arabia's emerging and expanding industries.
- educational services
- Innovations in medical facilities, equipment, and procedures
- finance and technology
- entertainment field
- Services for religious pilgrims
- Food/Daily Necessities
Additionally, the Kingdom has opened up to international tourism as part of its Vision 2030 initiative, and there is now a huge market for tourism-related services in the country.
This, in turn, leads to the need to strengthen the domestic transport industry and means more investment opportunities in both sectors.
Examples of successful startups in Saudi Arabia
Hundreds of young entrepreneurs have already taken advantage of Saudi Arabia's favorable conditions to establish start-up companies. Some notable examples include:
- ACWA Power – A power generation developer, investor, co-owner and operator focused on renewable energy. Established in 2004.
- Fordeal – a cross-border purchasing marketplace for lifestyle products in the e-commerce space. Established in 2017.
- Lendo – A financial services startup that provides a peer-to-peer lending platform focused on debt financing for small and medium-sized businesses. Established in 2019.
- Jahez – A food delivery platform that connects restaurants, logistics vehicles, and meal orders using a mobile app. Established in 2016.
- Nana – An e-commerce startup that provides online grocery delivery services. Established in 2016.
- PayTabs – A globally active, award-winning B2B online payment solutions provider. Established in 2014.
- Red Sea Farms – AgTech startup focused on the use of salt water to enhance commercial crop production. Established in 2018.
- Salla – A platform that provides guidance on starting an Arabic e-commerce business. Established in 2016.
As you can see, these startups are carving out a business niche in Saudi Arabia by taking advantage of emerging industries such as online grocery shopping, digital payments, and renewable energy development. And many of them are currently enjoying great success.
How to set up a startup in Saudi Arabia
Once you have decided on the type of startup you want to establish in Saudi Arabia, you will need to start sorting out the licenses and permits needed to operate your business in Saudi Arabia.
These will vary depending on the type of business you are setting up, but will typically require the following:
● Rent a business premises or work with a local service agency.
- Obtain an investment license from Saudi Arabian General Investment Authority (SAGIA)
- Apply for commercial registration certificate, Articles of Association (AOA), and Memorandum of Association (MOA) with the Ministry of Commerce and Investment
- Hire a service provider to help with your daily tasks. From language experts who can provide translation services in French, Hebrew, and especially Arabic, to experts who can do digital marketing, you need help.
To set up a company in Saudi Arabia, you will also need to open a Saudi bank account, have your articles of association notarized, and submit proof of this to SAGIA along with copies of your identity documents, passports, and proof of address for directors and shareholders.
Once all these steps have been completed and the relevant visas have been obtained, you should be able to start working on a successful startup in Saudi Arabia.
